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Socially Responsible Mutual Funds – 5 Expert Tips if You Are Thinking of Investing in Green Mutual Funds – Part 2

4) Be sure to differentiate between reality and idealism. You can make single-stock investments into “ideas” and real companies. Good examples of each would be Tesla (idea) and GE (real company). You shouldn’t expect your “idea” investment to make a lot of money, especially if you compare it to other funds that are actively managed. But with a fair amount of you will at the very least ensure that your “idea” won’t lose you any money. Then you can make room for “real companies” like Ford and GE, which can scale up the technology or even the entire product of those smaller “idea companies” like Tesla. If the idea that Tesla is trying to sell is a really good one, then chances are, a large company like GE will pay to mass-produce it.

5) It is important to note that not all funds that claim to be socially responsible or “green” actually are. Funds that are actively managed are done so with great discretion. The result is that while so many of them claim to be “green”, only some of them hold up to their promise. In fact, there is a major fund that is family advertised and socially responsible and green, but its top ten holdings include General Mills, IBM, and 3M. It sounds like it is more like a large cap fund than a green mutual fund.

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The information supplied in this article is not to be considered as medical advice and is for educational purposes only.